Raymond, Debra and Robert are partners in a firm which provides accounting and business management services...
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Raymond, Debra and Robert are partners in a firm which provides accounting and business management services to small and medium businesses. Marie owns and operates a communications business which she wishes to franchise and she contacts Raymond to become a client of the firm. Raymond does not share Marie's business with Debra and Robert. Instead, Raymond suggests to Marie, that he, Raymond act separately and privately for Marie as he has a 'broader global vision' than the firm. Marie agrees and as her business grows, Raymond makes a significant profit. Eighteen months later, Debra and Robert discover that Raymond is working for Marie and demand that they share in Raymond's earnings from Marie. Raymond refuses. Discuss the issues raised by Raymond's behaviour. Will Debra and Robert be successful in their claim? What effect may Raymond's behaviour have on the partnership? Give reasons for your answers. Comment: The relationship between partners is a fiduciary relationship which means there must be "mutual trust and utmost good faith". This relationship is reflected in the duties that the partners owe to each other, two of which Raymond has breached by taking on Marie as a personal client. As you mentioned above Raymond should have accounted for any private benefit and refrained from carrying on any business of the same nature. Based on the above scenario, please answer the following * Will Debra and Robert be successful in their claim and why? * What effect may Raymond's behaviour have on the partnership? Raymond, Debra and Robert are partners in a firm which provides accounting and business management services to small and medium businesses. Marie owns and operates a communications business which she wishes to franchise and she contacts Raymond to become a client of the firm. Raymond does not share Marie's business with Debra and Robert. Instead, Raymond suggests to Marie, that he, Raymond act separately and privately for Marie as he has a 'broader global vision' than the firm. Marie agrees and as her business grows, Raymond makes a significant profit. Eighteen months later, Debra and Robert discover that Raymond is working for Marie and demand that they share in Raymond's earnings from Marie. Raymond refuses. Discuss the issues raised by Raymond's behaviour. Will Debra and Robert be successful in their claim? What effect may Raymond's behaviour have on the partnership? Give reasons for your answers. Comment: The relationship between partners is a fiduciary relationship which means there must be "mutual trust and utmost good faith". This relationship is reflected in the duties that the partners owe to each other, two of which Raymond has breached by taking on Marie as a personal client. As you mentioned above Raymond should have accounted for any private benefit and refrained from carrying on any business of the same nature. Based on the above scenario, please answer the following * Will Debra and Robert be successful in their claim and why? * What effect may Raymond's behaviour have on the partnership?
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The following moral and legal concerns will result from Raymonds behavior in their partnership Breach of fiduciary duty This is a situation where part... View the full answer
Related Book For
Auditing and Assurance Services
ISBN: 978-0077862343
6th edition
Authors: Timothy Louwers, Robert Ramsay, David Sinason, Jerry Straws
Posted Date:
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